Life InsuranceInsurance companies deny over 5,000 life insurance beneficiary claims every year in America. The Los Angeles Times 2010 article “Flaws can cancel life insurance—after death,” says that based on data it compiled from the National Association of Insurance Commissioners, over the last decade the amount of money life insurers withheld from beneficiaries more than doubled, to $372 Million, in 2009. While a number of claims are wrongly denied, valid reasons for insurers to deny claims include:
- Unpaid premiums
- Beneficiary fraud
- Material misrepresentation
- Failure to follow claim requirements
- Material misrepresentation is the top reason for claim denial.
- Pre-existing medical conditions
- Smoking or drinking habits
- Dangerous occupations
- Dangerous hobbies
- Age (significantly older or younger)
- Actual income
- The existence of other insurance policies
- Is of a material fact
- Affects the risks assumed
Texas rescission lawThe days of limitless insurance policy rescissions (or cancellations) are gone in most states, and this offers a more favorable legal perspective for the insured. Prior to states passing rescission limitations, insurance companies could freely issue policies and later rescind them. Today the majority of states, including Texas, have two year limitations on rescission, which means that after two years of paying premiums on a life insurance policy, you do not have to worry about the insurance carrier rescinding your policy. In addition, Texas has stiff rescission requirements for insurers. Both the Texas Supreme Court and the U. S. Fifth Circuit Court of Appeals have held that an insurer seeking to rescind a life insurance policy must plead and prove five elements1:
- Actual making of a representation
- Falsity of the representation
- Reliance on by the insurer on the false representation
- Intent to deceive by the insured in making the false representation
- The materiality of the false representation
Legal help for fulfilling the purpose of life insuranceThe purpose of life insurance is to guarantee a certain quality of life to your beneficiaries after you die by providing them with life insurance income. If you believe your loved one honestly provided all the facts and the insurance company is wrongly denying your claim as a beneficiary or wrongfully rescinded a policy, get legal help. If your insurance carrier denies your claim and gives material misrepresentation as the reason, an experienced lawyer can review your situation to determine validity and defend your rights under Texas insurance law. Many denials of life insurance benefits are invalid. Call 409.835.3521 or contact a life insurance attorney at Bush Lewis online today for a free consultation to discuss your life insurance claim. 1 Lee v. Nat’l Life Assurance Co. of Can., 632 F.2d 524, 527 (5th Cir. 1980); Mayes v. Mass. Mut. Life Ins. Co., 608 S.W.2d 612, 616 (Tex. 1980). General American Life Insurance Co. v. Martinez, 149 S.W.2d 637, 640–41 (Tex. Civ. App.—El Paso 1941, writ dism’d judgm’t cor.).
Know This Before An Accident
No one plans to have an accident and no one expects to sustain a serious injury or lose a loved one to death from someone else's actions or mistake. It helps to at least have heard what experienced lawyers say you can do to ease the situation. At Bush Lewis, we think there are some helpful guidelines that we recommend to you. Our lawyers suggest: Learn more.